Board of Education of the Cleveland City School District v. Urs Co., Inc.
| Decision Date | 22 September 1994 |
| Docket Number | 64496,94-LW-3640 |
| Parties | BOARD OF EDUCATION OF THE CLEVELAND CITY SCHOOL DISTRICT, Plaintiff v. URS COMPANY, INC., Defendant/cross-claimant, Third party plaintiff/appellant and THE DOW CHEMICAL COMPANY, et al, Defendant/cross-claim, Defendant/appellee |
| Court | Ohio Court of Appeals |
Civil appeal from Court of Common Pleas Case No. 113,147.
For defendant/cross-claimant/Third-party plaintiff/appellant MARK E. STAIB, KIM M. HASTINGS, ROYCE R. REMINGTON, Attorneys at Law, 3300 BP America Building, 200 Public Square Cleveland, Ohio 44114.
For Defendant/cross-claim/Defendant-appellee: STEPHEN D. WALTERS Attorney at Law, 2500 Terminal Tower, Cleveland, Ohio 44113-2241.
In this appeal, the cross-claimant, URS Company, Inc. (hereafter "appellant" or "URS"), challenges the trial court's decision granting the cross-claim defendant, The Dow Chemical Company (hereinafter "appellee" or "Dow"), summary judgment on appellant's second amended cross-claim for indemnity and/or contribution, fraud and breach of contract.
This appeal stems from a complaint filed on July 14, 1986 by the Board of Education of the Cleveland City School District (hereafter the "CBOE") naming both URS (f.k.a Elerby/Dalton & Dalton, Little & Newport) and Dow, among others, as defendants. The suit arose out of the design and construction of two buildings for CBOE: the School of Science classroom building and the Planetarium Dome (hereafter the "Dome"). URS, an architectural and engineering firm, was involved with both buildings; Dow was involved only with the Dome.
Both URS and Dow answered CBOE's complaint and filed cross-claims for indemnity and contribution, as did some other defendants. In June of 1988, CBOE moved to amend its complaint to add a cause of action against Dow for fraud. The trial court overruled appellant's motion for leave to amend, which ruling this court reversed and remanded in Bd. of Ed. of the Cleveland School Dist. v. URS Company, Inc. (Dec. 7, 1989), Cuyahoga App. No. 56260, unreported.
Subsequently, on November 5, 1990, CBOE filed its third amended complaint adding a claim of fraud against Dow. On November 20, 1990, URS timely answered and filed a second amended cross-claim against Dow to assert claims for indemnity and contribution (first claim for relief), and, for the first time, claims for fraud (second claim for relief), and breach of contract (third claim for relief), all of which arose out of the same facts upon which the original pleadings were based. Dow filed a motion to dismiss and/or for summary judgment on URS's cross-claim. The trial court granted Dow's motion, and URS perfected an appeal to this court; however, because the trial court's judgment entry did not expressly state there was no just reason for delay, this court dismissed appellant's appeal. See, Bd. of Ed. of the Cleveland City School Dist. v. URS Company, Inc. (Feb. 17, 1994), Cuyahoga App. No. 64496, unreported. Upon appellant having obtained a corrected journal entry expressly determining that there was no just reason for delay, this court granted appellant's motion for reinstatement of the within appeal and vacated our entry dated February 17, 1994. Civ. R. 54(B).
The pertinent facts giving rise to this appeal are found in the evidentiary materials attached to the parties' briefs in support of, and in opposition to, Dow's motion to dismiss and/or for summary judgment.
In October of 1965, the CBOE contracted with URS, an architectural and engineering firm, for architectural services to be rendered in connection with the design and construction of the School of Science. URS designed the main building of the School of Science but, according to Algirdas Liutkus (an architect at URS), because dome design is highly specialized, URS sought to subcontract the design and construction of the Dome to an expert in the dome trade.
URS undertook to interview potential contractors to design and build the Dome. The criteria utilized by URS, in conjunction with the CBOE's requirements, were that the Dome contractor have a proven track record of designing domes with unquestioned structural stability, no propensity for or past problems with cracking or leaking, and the ability to provide everything from the design through the final construction of the Dome. According to Mr. Liutkus, Dow was one of many dome contractors interviewed by URS for the Dome contract.
Mr. Liutkus further averred that during the interviewing process, Dow expressly represented to URS and the CBOE that its domes were structurally stable and did not crack or leak and that Dow would provide and be responsible for a complete dome from design through construction. Based on Dow's representations, URS awarded Dow the contract to draft the preliminary design and specifications for the Dome. A memorandum of the May 11, 1973 agreement between URS and Dow is attached to URS's cross-claim.
It is undisputed that the preliminary process for building the Dome included obtaining approval for the design of the Dome from the City of Cleveland Board of Building Standards and Appeals (hereafter the "BBSA"). Both URS and Dow were actively involved in the approval process, which included their appearance before the BBSA in hearings held in 1973.
At a hearing before the BBSA on April 2, 1973, a Dow representative, Mr. Teneyak, spoke in general terms of the structural stability of Dow domes and also spoke briefly about the structural stability of specific domes previously built by Dow. Mr. Teneyak acknowledged that Dow had not built any domes which, like the CBOE Dome, were "greater round than a hemisphere." Mr. Teneyak further acknowledged that this did present a problem but represented that Dow would take care of the structural capacities. Mr. Teneyak assured the BBSA that Dow domes did not crack and that there would be no problems with differential settlement because of the stiffness of the concrete.
Later, at a hearing before the BBSA on August 30, 1973, a Dow representative spoke elaborately about the quality control work Dow undertakes during the construction of its domes. Again, Dow represented to the BBSA that Dow domes were not affected by differential settlement.
Finally, at a hearing before the BBSA on October 1, 1973, Mr. Teneyak spoke about the failure of a Dow dome in El Paso, Texas. Mr. Teneyak explained that the dome partially collapsed during construction due to an equipment failure. Mr. Teneyak explained that the problem with the El Paso dome was with its large size or diameter, which would not be a problem with the smaller CBOE Dome, and a failure on Dow's part in monitoring the construction of the dome. It was further represented by Dow that Stephen Waling, a Dow engineer who supervised the domes' structural calculations, would obtain a professional engineer's license in the State of Ohio.
The project was approved and, in May of 1974, the CBOE awarded the contract for construction of the School of Science to Panzica Construction Company (hereafter "Panzica"), and Panzica then subcontracted with Dow for the final design plans and specifications and for the exterior of the Dome. URS served as project manager for both the classroom building and the Dome.
The Dome was designed by Stephen Waling of Dow. Although Waling was a licensed engineer in the State of Michigan, both URS and the BBSA required that he secure an Ohio professional engineer's license for the Dome project. As previously stated, Dow had represented at the BBSA hearing of August 30, 1973 that Waling world secure an Ohio engineer's license. Additionally, on March 18, 1975, Mr. Waling sent a letter to Nancy Panzica, and a copy to James Goncher of URS, in which he represented that he had applied for such registration. However, appellant points out that Mr. Waling testified in deposition that he, in fact, never applied for an Ohio professional engineer's license.
According to Dow, construction of the Dome exterior by Dow through subcontractors began in June of 1975 and was completed on October 23, 1975. However, URS, through Mr. Liutkus's affidavit, represents that it was not satisfied with the Dome's exterior shape and color and declined to approve it. In March of 1976, URS discovered, and informed Dow, that the Dome had exterior cracks. URS then requested Dow to investigate the problem.
Further, in a letter dated March 12, 1976, URS notified the CBOE of the aforementioned cracks and advised that the defects in the Dome necessitated "consider[ing] alternate major solutions to the whole problem from resurfacing or covering the existing dome to and including dismantling the dome. ***"
On March 18, 1976, URS issued a certificate of substantial completion for the main building only. The certificate was signed by URS, Panzica and the CBOE. On April 12, 1976, Stephen Waling of Dow, in a letter addressed to Nacy Panzica, advised that the cracks in the Dome were not a structural problem and that Dow personnel were evaluating alternative approaches for exterior treatment. URS, however, points to Waling's deposition testimony in which he admitted that he had never personally investigated the source of the cracks.
According to URS, after the completion of certain cosmetic repairs to the Dome, including surface repair of the cracks Dow still represented to be non-structural, URS issued another certificate of substantial completion for the main building and Planetarium Dome building on January 16, 1977. This certificate was signed by URS, Panzica and the CBOE.
Later in a letter dated June 22, 1977, Dow informed the CBOE that since the construction of the CBOE's Dome, three similarly constructed domes had collapsed. Dow stated it had no reason to believe any of the structural defects peculiar to the collapsed domes existed in the...
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